CFTC Chair Behnam presses Congress to act on crypto and election betting legislation

"There's a lot going on in terms of technology and disruption. Digital assets obviously comes top of mind in terms of just regulating spot markets, but what is blockchain and tokenization going to do for financial markets? And those are areas where I personally would love for Congress to weigh in a little bit more than they have," Behnam said on Monday at the Securities Industry and Financial Markets Association's annual meeting.

Behnam, who has previously pushed for crypto legislation, said he doesn't expect Congress to get anything done this year, given the holidays and the need to pass a federal budget. 

"I think as we look into 2025, a new Congress, a new president, that you're likely going to see some legislation," he said. 

Lawmakers have a few bills on the table, including FIT21, which would grant more power and funding to the CFTC to oversee crypto spot markets and "digital commodities," particularly bitcoin. FIT21 passed out of the U.S. House of Representatives in May but has not gained traction since. House Financial Services Committee Chair Patrick McHenry, R-N.C., who is retiring in January, has voiced optimism that it could pass before the end of the year. 

Election betting 

The CFTC has also been focused on predictions markets, which allow users to bet on the outcome of future events, from the total snowfall in New York City this month to the severity of a possible recession this year. 

The CFTC has consistently held that event contracts on elections are unlawful and that kind of betting puts the agency in a tough spot as an "election cop," Behnam said on Monday.

"This is a classic area where I think Congress should actually weigh in," Behnam said. 

The agency has been embroiled in a legal fight with predictions market Kalshi over the past year when it said that the firm could not offer elections contracts, adding that they were "contrary to the public interest." Kalshi then sued in November 2023. Then, Judge Jia M. Cobb for the U.S. District Court for the District of Columbia ruled last month that the CFTC went beyond its statutory authority when it tried to block Kalshi from offering election contracts. The agency quickly appealed that ruling, but was ultimately quashed by a federal appeals court on Oct. 2.

Since then, Kalshi has launched bets on who will win the U.S. presidential election.

The CFTC made its latest move last week when it argued in an appellant brief that the judge's ruling was wrong and asked for it to be reversed.